The European Commission has approved, under the EU Merger Regulation, the proposed acquisition of EQOS by Eiffage. The approval is conditional upon full compliance with commitments offered by Eiffage and EQOS.
Eiffage and EQOS are both active in the construction, maintenance and optimisation of infrastructure. EQOS, via its subsidiary EQOS Belgium, and Eiffage, via its subsidiary Duchêne, are two leading providers of installation and maintenance services of catenaries and overhead contact lines for long distance rail in Belgium.
The Commission's investigation
The Commission's investigation showed that the merger, as initially notified, would have reduced competition in the market for the provision of installation and maintenance services of railway catenaries in Belgium. In particular, the Commission found that Eiffage and EQOS are leading providers of such services in Belgium, where they have large market shares and compete frequently in calls for tenders. In addition, the Commission's investigation showed that this market is characterised by significant barriers to entry and expansion due to an important shortage of qualified personnel. The Commission was therefore concerned that this would give rise to higher prices for the provision of installation and maintenance services of catenaries in Belgium.
The proposed remedies
To address the Commission's competition concerns, the parties offered to divest EQOS Belgium in its entirety, including all assets, personnel and ongoing and future contracts of both its catenaries and track businesses. As a result, EQOS Belgium will remain an independent competitor to Eiffage in the relevant market in Belgium.
These commitments fully address the competition concerns identified by the Commission by creating a viable and attractive business that would enable a suitable buyer, approved by the Commission, to effectively compete with the merged entity on a lasting basis.
Following the positive feedback received during the market test, the Commission concluded that the proposed transaction, as modified by the commitments, would no longer raise competition concerns.
The decision is conditional upon full compliance with the commitments. Under the supervision of the Commission, an independent trustee will monitor their implementation.
Companies and products
Eiffage, headquartered in France, is a multinational construction and concessions group operating in construction, infrastructure, concessions, and energy. Its subsidiary Eiffage Energie Systèmes, Eiffage provides energy solutions for the design, building, operation and maintenance of various systems and facilities, used in the electrical sector, for industrial and energy engineering or for heating, ventilation and air conditioning.
EQOS, headquartered in Germany, is a multinational group specialized in the construction, maintenance and optimisation of infrastructure solutions in the areas of railway technology, overhead line construction, energy, communications, industrial technology and engineering. It subsidiary EQOS Belgium (formerly Colas Rail Belgium) provides catenary and overhead contact line installation and maintenance services as well as track works in Belgium.
The transaction was notified to the Commission on 28 August 2024.
The Commission has the duty to assess mergers and acquisitions involving companies with a turnover above certain thresholds (see Article 1 of the EU Merger Regulation) and to prevent concentrations that would significantly impede effective competition in the European Economic Area or any substantial part of it.
The vast majority of notified mergers do not pose competition problems and are cleared after a routine review. From the moment a transaction is notified, the Commission generally has a total of 25 working days to decide whether to grant approval (Phase I) or to start an in-depth investigation (Phase II). If commitments are proposed in Phase I, the Commission has 10 additional working days, bringing the total duration of a Phase I case to 35 working days, such as in this case.
More information on this case is available on the Commission's competition website, in the public case register under the case number M.11577.
Quote(s)
EQOS and Eiffage are leading providers of electrical engineering services for railway contact lines in Belgium. The transaction would have greatly reduced competition in this market. The divestment of EQOS’s Belgian business will preserve choice and competitive prices.
Margrethe Vestager, Executive Vice-President in charge of competition policy
